The nation's largest banks are undergoing stress tests right now to determine their degree of leverage and financial health. On one level, it appears a little like getting the 300-pound heart-attack victim who has been eating jelly doughnuts for 20 years onto a treadmill. A five-minute exercise on a machine you're not used to won't solve the core problem. I think there's a lesson for our industry.
Distributors and manufacturers have been undergoing stress tests of a different nature for at least the past 12 months. Nearly every company we talk with has had to make significant structural changes in their organization, including layoffs. Some let employees go for the first time in decades. Your current team has had to adapt and take on more complex roles and responsibilities as the company does more today with fewer resources.
It's not only incredibly stressful for employees trying to adapt, but for you as well - a leader who is entirely invested (financial, physical, mental, spiritual) in the company and most likely defines a good measure of your personal success around the core performance of the company. Regardless of how lean your company is, you and your employees need new skills to adapt to conditions today, as our lead article points out.
Going forward into the earliest stages of a weak growth cycle, companies that find ways to preserve or increase their core value through this pressure cooker will win a higher proportion of market share. As the article notes, the people who are the most valuable are those who are constantly learning, and can absorb new information, and combine it with what they already know. When that happens among your team, it translates into value for customers and competitive advantage.
The first step during this most stressful time is to get out of your bunker and get everyone on the team communicating more than ever before.
Companies dealing best with these times are those with leaders who got off the rollercoaster before this last freefall. They built processes into the company that moderated a "sales-at-any-cost" mindset focused entirely on topline revenue, not profitability. They trimmed the waistline before the heart attack happened. Beyond that, those companies that create incentives for a team effort in sharing knowledge, communicating and learning are doing as much as possible to get through the current stress test.